Systems Leadership 2020: Entering the Flow
Classes 4–7
As we hit the middle part of the course we saw patterns emerge in the leaders who visited: clarity on their challenges, strong perspectives on their markets, and the ability to make hard choices when required to do so. Each leader seemed to have a realistic outlook on the status of their company and the world, but an internal drive to keep things moving forward regardless of the issues that they were facing. Our next set of leaders could not have come from a substantively different set of industries, and each put their own stamp on the classroom discussion.
Session #4 — Ken Washington, CTO Ford
April 14, 2020
Over the years we’ve had leaders from the mobility industry come to Stanford and discuss changing business models, new technologies, and how the automotive value chain will be transformed over the next couple of decades. When Ken Washington started talking, he began with a POV that I have not heard previously in leaders from incumbents or disruptors: He stated that in his role he believes one of the most important things Ford needs to do is focus on the UX (user experience) for vehicles, as that is where the battles will be won or lost over the long-term in his industry.
Washington painted a vision of low-cost sensors that will enable autonomous vehicles to take advantage of cloud-based computing for safety and other services, which will create a positive reinforcing circle to decrease the costs of driven and autonomous vehicles. It was fascinating to hear an executive from an established automotive OEM spend a large chunk of his time sounding like a network architect from Silicon Valley. When he added that one of Ford’s competencies is to manufacture vehicles at scale, the students were able to see a Systems Leader who is blending the old and the new and who is not constrained in either side of the mobility evolution.
Additionally, Washington talked about the role of seeing the world as a series of local markets — urban and rural, European and Asian and the Americas, etc. He not only expressed deep admiration for the disruption that was coming out of new entrants into the mobility market, but he also understood the global dynamics and the impact of China as a leader in vehicles. As he stated at one point, it is only a question of “when” China becomes an exporter of vehicles, and when that happens it will redefine much of the global mobility industry. Washington is relatively new to the automotive industry, but his background at Lockheed Martin and Sandia National Labs has given him the ability both to navigate in a large incumbent organization but also bring an outsider’s POV to his role. Washington also demonstrated the ability to see the entire game-board while remaining focused on the moves his company can make.
Crisis Lesson #4 — Reset Your Clock: In a crisis information is reset quickly and dramatically. Every day is a month; every month is a year. Learn to reset your clock. The information and decisions will come at you in fast order, so you should keep getting smarter.
Session #5 — Seth Bodnar, University of Montana
April 15, 2020
While many of our leaders showed strong emotions and passion, Seth Bodnar, President of the University of Montana, showed an unbelievable empathy in his role as the leader of Montana’s public university school system. A former Special Forces officer, Assistant Professor at West Point, and executive at GE, Bodnar was dealing with the disruption to his university system from the pandemic when we held our session. His students were having to leave their dorms and campuses, education was being moved online, and the University of Montana, which plays a critical role in educating people in the state, was being buffeted by the same headwinds that we were at Stanford.
But Bodnar’s perspective was incredibly different from those shaped by the challenges our students are facing.
Bodnar spent much of his time talking about the purpose of the University of Montana, and his role of serving others throughout his career. He stated clearly that online education is having an impact on how material is transmitted to students, but Bodnar also highlighted the various constituencies impacted by higher education in Montana (students, faculty, administrators, government, etc.). He stressed the purpose that a system like the University of Montana plays for all of these constituents. What was clearly framing Bodnar’s outlook was the idea that education must enable inclusive prosperity for all in our society in various socioeconomic classes, and in a world of an increasing rate of technological change, how he and the University must enable students, faculty and all constituents to have careers that are “ready for today and also tomorrow-proof.”
At one point Bodnar talked about the importance of an institution’s greatness as juxtaposed to a leader’s greatness. He asserted that a leader must always understand whom he/she serves. The more he spoke the more the students could see how Bodnar exemplified the importance of understanding and maintaining the mission of his institution while simultaneously embracing the future and its corresponding changes — of running towards the disruption while not being encumbered by what had come before.
Bodnar’s quiet calm was as passionate and powerful as any leader we’ve had — and struck close to home given our educational mission.
Crisis Lesson #5 — Hold Two Truths: During a crisis, leaders must hold two truths at the same time: Things can always get worse and there are huge opportunities. Being able to run both plays is an important attribute of Systems Leadership.
Session #6 — Jeff Zucker, Chairman Warner Media News and Sports
April 16, 2020
When you have a leader as strong and fiery as Jeff Zucker, you expect that you are going to have a lively classroom session. In this case, expectations were clearly met, and possibly exceeded.
Our discussion opened with the question of whether or not CNN should be thought of first and foremost as a for-profit entity or a public good. Depending on how one thinks about this question shapes the actions a leader will take on issues such as content programming, external messaging and perspective towards employees. The students were pretty evenly split; several highlighted that CNN is part of a large media company and it makes over $1 billion per year — it is and should be run as a for-profit entity. Others discussed the importance of the press in the legacy of The Fourth Estate — both to advocate and to frame societal issues. Given the network’s current battles with the President the United States, the students were pretty evenly split on the role that the media, and CNN in particular, should play.
Zucker was emphatic in his POV: CNN needs to do both. He asserted the importance of his network’s advocating for truth, but that they also have a responsibility and an imperative to make money for their parent organization. He posited that CNN’s goal was to be essential, and he highlighted with great pride, the educational and informational role the network has been playing in the coverage of the global pandemic.
Zucker also stated transparently that ratings tie into revenue numbers, and in a world where CNN is a highly successful business they need to balance how to deliver large audiences while also staying true to its role of “advocating for truth.” Zucker was also clear in his perspectives on the role that social media is having in today’s world, and his concern that traditional media is challenged in a landscape where falsehoods can spread with a speed never previously seen.
One of Zucker’s unique historical talents has been his ability to successfully choose successful products in the media industry. We have argued in the past that great Systems Leaders have a Product Manager’s mindset — understanding what customers want and the ability to deliver these products and services to meet those needs. It is difficult to unlock the “secret sauce” to a media leader’s impressive record of winning content choices (including The Apprentice), but in Zucker we saw decisiveness with curiosity; the willingness to learn and pivot. There are great attributes for a product manager.
Crisis Lesson #6 — Learn to Say, “I Don’t Know:” It is hard for leaders to feel vulnerable. Yet, in a crisis, no one has all the answers. It is ok to admit that you are not in control of what is happening in the world. But, by working together, you can pick the best path.
Session #7 — Ryan Lance, CEO ConocoPhillips
April 21, 2020
The day before Ryan Lance was scheduled to come to our class, the price of oil went negative. I remember reading that fact online and wondering if I could drive to my local gas station, fill up the tank in my car, and if they would give me money before I left.
The answer was no.
But I can pretty comfortably state that I bet Lance never imagined the price of oil being negative in 2020. The drop in demand due to the pandemic, the global price war between Saudi Arabia and Russia, and the rise of the United States as an energy powerhouse had created a situation that some could only describe as absurd.
And in the middle of all of this Lance is having to balance the impact of digitization on an “old-line company” (AI, asset utilization, etc.), climate change, and doing business in a variety of geographies with completely differing cultural norms.
Just another day at the office…
As we started our discussion Lance reminded the students that the energy industry is far more technologically advanced than one might think. He pointed out that ConocoPhillips has the ability to drill a hole two miles down, go horizontal another two miles, and then come up two miles and exit the ground within one foot of its targeted objective. He stressed the idea that in his industry, where he cannot control price, that being a low-cost leader is imperative for being competitive, and as such issues around uptime, utilization, etc., are critical for ongoing financial success. And technology is a key driver to being competitive.
Lance also stressed that he is aware of the perception that the energy industry is in its sunset, and that has made it difficult to attract and retain young talent at a time of massive technological innovation. And while he believes that oil and gas will stay a part of the global economy for the next 50+ years, he is also aware of the importance of climate change and the changing natures of demand and regulation which will impact the energy industry.
Lance also raised the challenges of not only regulatory oversight (ranging from safety to carbon taxes), but that in different parts of the world doing business has incredible complications with varying government norms towards corruption, developing local talent and resources, etc.
And on a day when the price for oil was negative, Lance was unwavering in the crisis. He laid out his plan for ConocoPhillips, came across as having his eyes wide open, and of being very proud of his work and his team.
As one of the students said to me in an email after the class, “I never thought I would like the CEO of an oil company…”
Crisis Lesson #7 — Keep a Flexible Point of View: During a crisis nothing is forever. You may make a decision one day and reverse it the next. Here you see a divergence between investors and operators. Investors want certainty (“cut once and deep”). Operators want to make decisions based on what they see. You need both. But history shows that you will make many decisions during a crisis. Stay flexible.
